How Does the Theory of Efficiency Wages Explain Above-Equilibrium Wages

question 343

Multiple Choice

How does the theory of efficiency wages explain above-equilibrium wages?

• A) Employers are forced to pay higher wages in efficient markets.
• B) Employers give their workers a higher wage in the hope that it will lead to increased productivity.
• C) Workers get higher wages when they prove they are increasing their productivity.
• D) Workers demand higher wages to compensate for poor fringe benefits.

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Definitions:

Social Movements

Enduring collective attempts to change part or all of the social order by means of rioting, petitioning, striking, demonstrating, and establishing lobbies, unions, and political parties.

Social Order

The structured pattern of social arrangements and relationships that shape a society, maintained through cultural norms, institutions, and laws.

Bureaucratically Organized

Describes an organization structured in a hierarchical manner with clear rules and procedures, where tasks are executed systematically and through administrative processes.

Collective Attempts

Joint efforts or actions taken by a group of individuals or entities towards achieving a common goal.